That Time I Almost Went To Work For Investor’s Group

Sometimes people (usually women, let’s face it) like to think about how their lives would have been different if they had made some different decisions. What would have happened if they’d pursued that relationship? How different would life have become if they’d taken something different in college? We all know that seemingly small decisions can have large impacts, thanks to luck and all that junk.

Although I’m no woman, (checks pants to confirm) I’d like to take you back to the year 2004 and the story about my series of interviews with one of Canada’s largest money managers, Investor’s Group. I promise, the story has a point. It does not, however, contain any gratuitous nudity. The internet is filled with porn, go nuts you horndog.

I was 21 years old, working in a grocery store. I was also a business channel addict. When I wasn’t working, I was watching and learning everything I could about the markets. I was also starting to dabble in buying stocks, basically doing a less refined version of the contrarian investing that I do now. I was single, naturally, because I’m always single. Watching BNN for 5 hours a day probably had something to do with it, but I digress.

One day, I noticed an ad in the paper. Investor’s Group was looking to add a second rep to my town. As you can probably tell from my BNN addiction, I desperately wanted into the business. Naturally, I applied, and got a call back for an interview. I’m sure I celebrated by dancing like some sort of white guy with no rhythm.

Before we continue, a little background for those of you unfamiliar with Investor’s Group. They’re a wealth management company with many billions under management. Reps have their own office space, supplied by the company, and they’re responsible for building up their business. The company offers mutual funds with some of the highest expense fees in Canada, they also offer life insurance products and some (at least last I checked) really horrible mortgage products. Like any financial company, they want all your money. Back to the story.

I go to the first interview and it’s pretty uneventful. The guy interviewing me is nice and we’re joking and laughing a bit. I was there for all of about 15 minutes. I’m assuming the first interview is a way to weed out all the crap, people who would have no chance of selling a thirsty traveler a Coke.

I go to the next interview, like the first it’s conducted in the local rep’s office. This time I’m armed with some questions. Just how much is my base pay? (bupkis) Where would be my territory? (Half my town, half a neighboring town, meaning 3-5 hours of travel per week) Am I forced to only sell the company’s funds? (No, but selling in-house funds paid a much nicer commission)

The guy conducting the interview had definitely drank the company’s Kool-Aid. Yes, he explained, the fees on their mutual funds were much higher than comparable ETFs, but that was because Investor’s Group reps did such a good job educating investors. The difference in fees was more than made up with the terrific service.

In my head, I’m disagreeing with every word he said. Fees kill the average investor’s return, anyone with a grade 6 understanding of math can figure this out. The whole reason for the financial plan wasn’t to educate investors, it was to identify areas where a rep could sell other financial products to someone in need.

As we concluded the interview, I was given a homework assignment for the week until my final interview with buddy’s boss. I was supposed to talk to 50 people and ask them if they’d be willing to commit to doing business with me as an Investor’s Group rep within the next 6 months, and to ask specifically how much money they’d be willing to invest with me.

I was flabbergasted. Firstly, I was trying to keep this whole interview process as quiet as possible, since I didn’t want my employer to find out about it. And secondly, why should I go and do all this work when I was guaranteed nothing? I wasn’t looking forward to doing this but, undaunted, I started to call people.

I got about 8 callers in and promptly declared the whole operation stupid. So I faked it. I made pretend notes for 50 actual people I knew. Armed with my pretend prospective customers, I went up for my final interview.

As soon as I walked into the guy’s office, I knew this wasn’t going to go well. He was the stereotypical finance type, talking brash to his secretary, wearing an expensive suit, and let me to an office with autographed hockey memorabilia all over the place. He begins the interview.

“Why aren’t you wearing a suit?”

I look down at my dress shirt (no tie) and dress pants. I fire back.

“Because you don’t need a suit to sell mutual funds.”

He looks a little surprised, and then proceeds to lecture me for 5 minutes about the importance of impressing your client with your clothes. After he’s finished, he asks where I’d rank my financial knowledge on a scale of 1-10.

I think about it for a minute and say I figure I’m about a 7.

“No you’re not.”

“Oh really. How would you know?”

“Because you’ve never worked in the industry.”

I frown, almost shocked at the lack of logic. He continues.

“What kind of car do you drive?”

“I don’t have a car.”

“What? Why not?”

“Because I’d rather invest the money instead.”

“How do you expect to work for us if you don’t have a car?”

“I have the cash to buy one.”

He looked at the notes I had made about my imaginary prospects.

“How come you didn’t ask them specifically how much they’d invest with you?”

“Because I thought it would annoy them.”

We wrapped up the interview shortly after that. It was pretty obvious I wasn’t going to get that job. I later met the girl who did. She was not unattractive.

Anyway, what’s the lesson here? There’s 2.

1. Investor’s Group sucks. Although I’m a little conflicted because I bought some of their stock back in 2006 and still own it. (EDIT: That stock was sold in 2014) Still, Investor’s Group sucks. Balls.

2. I am much more comfortable being a blue collar guy. It would take me a few more years to learn this lesson after a failed attempt at being a mortgage broker starting in 2007, but I’ve learned it now. That’s the important part, right?

31 Comments

It sounds like a nice ‘screw-the-investors’ kind of company anyway. They’re targeting people without money, or with some assets but nothing significant. The ones with real money, are already aware of how fees eat away at their returns and aren’t going to trust people in super expensive suits trying to coax them into buying their overpriced funds because of their ‘superior service’. Unless of course, the rep flirts…

Interesting they ask who and the amount that they would invest. My best guess is that they hit those leads hard after turning you down for a job. I hope you made up fake first and last names so that hundreds of people got phone calls/promotional materials from Investors Group.

I’ll never understand why people act like a suit (minus personality, please) is the only way to dress. Personally, I’d rather do business with someone who acts like a real person than some douche in a tie. Interesting post, though, and confirmation that I could never hack it in that universe. Oddly, I feel like I can go on living despite that knowledge.

The F.I.RE economy is all about screwing people, a.k.a. marks, with fees that no intelligent person would pay. They need to patronize people to make them feel like they can’t manage their own money, even though it’s really quite simple. If people woke up and realized they didn’t need schmucks like IG, they’d go out of business.

Companies recruit consumers. They show them the upside of their products. The recruits market the upside to their clients. Few consumers – or consumers turned recruits – are able to apply the analytical thinking required to say ‘what’s the downside of this’. They see the upside, and like it, and promote it. Consumers or recruits don’t get the downside, or don’t appreciate the inherent risk in some of this stuff.

And consumers are their own worst enemies. The best system IMO would be fee only financial planners. But people won’t pay fee only financial planners worth squat. The pay is in the ‘sales’. Which should illustrate how much value consumers place on being given advice vs. being sold something. If consumers wanted unbiased practical advice, they’d be interested in paying for it. But they’re not. Which is why recruitment generally focuses on those that can sell rather than those that have knowledge. It’s a lot easier to train knowledge than it is to train to sell.

Plus, many of these companies provide leads and an infrastructure. Try going it alone/independent in the financial industry with no support. You wake up Monday morning, and how are you paying your bills today? Same as everyone else, you pick up the phone and start calling – flogging whatever it is that you believe in. Without the company infrastructure many people would be unable to make a career out of it.

Investor’s Group hires people with a big network of friends/family. That way they can convince their grandma to buy some stuff, make commission and have the company makes commission. Since it’s mainly commission based, when employees runs out of people to sell stuff to, they usually quit. These kinds of companies have high turnover rates – they usually leave around the one year mark.

A friend of mine did get a job at Investors Group about a year ago now. He was living in Barrie, Ont. at the time. Lasted about 2 months. Said he couldn’t stand the company and the only thing they cared about was taking people’s money. Moved to Alberta to work in the oil fields.

Derek (freeat33) called home last night and told me I had to check out your site. He said you’re hilarious. You article stood up to the raving standard he set in our conversation. When will people wake up and use fee only planners. The only incentive fee only planners have is to make you money so you’ll refer your friends.

Thanks. I am a job-hunter, and was suspicious from the first sentence of this “sell”….

Start Date: TBD
Wage: Dependent
Hours: Full-Time
Duties: With the strength of a nationwide brand behind you, Investors Group enables you to succeed in today’s financial services market. We invite you to talk to us, and together we can help you decide if this is the right opportunity for you. We have recently expanded our office and therefore, we are looking to hire, train, and develop new consultants in the region…

….. etc, etc….

Thank you for putting a “human face” onto this rip-off company. I shall not be applying.

Wow did the wfg people migrate over to this thread? The only difference between IG and WFG is the quality of their suits and they will meet you in bricks and mortar buildings rather then sitting at a table in Tim Hortons.

$600 buys you your securities license but that does not make you an expert. It just gives you the ability to sell high fee products not always truly suitable to the people purchasing them. There are so many other better ways to create wealth and protect yourself, then any of these above mentioned companies offer.

Mark – there are way to many stories like this or even worse to discredit it like you are trying to do. Lets see how many customers you lose when CRM2 forces you to disclose your MF fees. Oh… I guess by then IGM will have dropped them. Otherwise some of your clients would have heart attacks and the insurance component will really come in handy.

As with any company, there are the good with the bad. I work at IG, and considered an offer from one of the big 5 banks as well. I chose IG because yes, the opportunity to make more money because it is commissioned, but also because I personally truly care about helping people get where they want to go.

Every consultant doesnt go into a meeting thinking give me all your money, some of us really look at what is best for the client. CRM2 will force us to disclose what the fees the client is paying. 2 things to this point: 1. We have already started disclosing fees a year in advance and are already stating this on clients statements. 2. A good advisor has that discussion with their clients and they completely understand what the fees are, and choose to work with that person because of the value they bring.

It’s not just buy mutual funds, it’s help the client find what is best for them and advise them to that.
Paul- There are many stories of satisfied clients who are more than happy with the value and service they get from IG. If you are smart enough to know one side, you know there is always another side to every story.

I can’t see how your CI policy got your wife in treatments any faster? My GF sadly also has cancer, and she has no insurance. After a few weeks of tests and her diagnosis, it was less then a week (Wednesday to a Tuesday – because it was a long weekend) before her first treatment. A CI policy would do nothing to change that timeline. Also since we all live in Canada everything is covered by Government health insurance. So what is your point?

Your fear-mongering and and throwing out a baseless comment about funds with an acronym “ROR” attached, which means what? Return on revenue?

CI policies allow you to go to private health care in other other countries because you have the means from the CI policy paying you out your coverage after diagnosis. But if you have an Investors Group consultant working for you; you would already be armed with that knowledge. I am sorry to hear about your girlfriend Paul N. And your wife SS. SS is much better prepared for such a horrible disease. Call it fear mongering, call it being protected properly, call it whatever you want. The fact is SS recieved sound advice and took it and he is much better prepared.
I sincerely hope there is a happy end to both of your stories.

Hey Liam, do you happen to work for Investors Group? Because I find that most of the people who tend to randomly show up on these threads and defend the company have some sort of bias that people should know about.

I guess I should follow up here too. The GF is better. 2 operations not including some biopsies and she was declared a cancer survivor. This was a 2 & 1/2 year process. Going back to earlier comments. Everything was free. The chemo, radiation, the surgeries
etc. The time it took to figure out the issue was long, but once in the system, I have to say I was really impressed with the speed, care and results.

I guess the only point I would agree on would be some kind of long term replacement of income for an individual. She was lucky because her down time was only a little longer then her sick days and vacation added up to. But I could see people that have a more serious long term illness simply needing longer term salary replacement. People need to just be insured “enough” – not with crazy all peril expensive policies that most will pay heavily for, but never get to use the benefits of.

There are two purposes for CI. you are missing the salient one. If your presence or income are required to cover the income and/or functions are essential to maintain your family’s standard of living, then a case of cancer or organ transplant will surely put a dent in your plans, especially if you are a stay at home mom or a worker without disability coverage. I know of at least one person who would have lost their home without CI coverage. The problem with the primary author of this piece is that he has a simplistic approach to financial planning, and most of his comments can be easily negated with actual facts.

Paul N
on June 29, 2017 at 3:55 pm

“If- If”…. its always a worst case scenario sob story to sell CI. I disagree with you. People need to purchase insurance to suit their specific needs, not to make surviving family members “rich” if the worst possible outcome occurs. It should be looked at like assistance and not a windfall. Its as relevant as a lottery ticket the way most agents try to push it.

I’m curious if you’re against all investment / financial planning companies, and think everyone should do their own financial planning, or are you against IG specifically?

I’ve seen studies that show the typical investor averages about 3% while the markets average about 10%. This disparity seemed pretty consistent over lots of different time frames.

Mutual fund fees are a drag on performance, but they’re not 7%. The real problem is that people, including financial advisors, suck at managing their investments. Doesn’t matter if you have over priced mutual funds, stocks, etf or whatever else.

I guess my point is that I’d rather have a good advisor charging a fraction of a percent more than a bad one that just doesn’t know what he’s doing. It would be ideal to have a good advisor that charges low fees, but that doesn’t make sense. No one good at something charges less.

I don’t trust banks because no one skilled would stay there making $70k per year. But with independents like IG you don’t know what you’re getting. Some are highly skilled, some didn’t know what a mutual fund was until 2 months ago.

I guess as I’m writing this I’m realizing that maybe the solution is more of a barrier to entry to the industry. Something so important shouldn’t be a sales job that anyone can just try out. Also, the public needs to know how to find a good advisor. What do you think?

I’m sure you never tell your clients they will lose over 30% of their invested funds to fees over 25 years. That gets to be a big number with lots of zero’s in it. Growth is a lot more about what you keep that gets reinvested then empty promises of 10% growth that you claim here. The average advisor (85% do not even beat the index benchmarks) is not going to add enough value to overcome the fees. The case is long closed on this subject. Most advisors are simply “salesmen” and IMO don’t even know they are are not working in their clients best interests half the time. The other half do know and abuse their position to extract more fees to pad their own pockets.

I don’t know where you get the idea of me promising 10% to “clients” I was just referring to a study I read saying markets average about 10% and the average investor typically does 3%.
Poor management costing the public 7% seems a little more important than the spread between a low MER fund and an expensive one (~1%). Run that through your calculator.

“I was just referring to a study I read saying markets average about 10% and the average investor typically does 3%.”

Your repeating some kind of “suggestive” talking point (from what, an internal memo from IG maybe?), but obviously you don’t even know what point it is you are trying to make. There is no correlation from your above statement to a clients actual real returns. But still you wrote that statement in the middle of a critique suggesting working with an advisor will get you better returns – even providing a spread of 7%? So in fact 10-3 =7%, you are suggesting a client is losing 7% in relation to what you wrote… So it is very relevant to your point.

Your generalizing about two completely different subjects and trying to create a loose connection. In fact you are technically making the case for people to index invest (after all a 10% percent return “from the markets” is pretty good) with that statement and not use an advisor at all.

Paul, you seem like you’re pretty upset with IG. Maybe you and the writer are the only two people in history that they refused to hire? I think you’re more focused on anti-IG internet trolling than adding to the conversation I was trying to have.
I believe the study was from BlackRock, but I’m sure there are plenty more out there just like it.
I am strongly in favor of index investing, but that’s obviously not the conversation I was trying to have.
I didn’t suggest working with an advisor would give you better returns. I suggested that working with a good advisor would.
I can’t see anywhere in my posts that I defended IG or suggested that I work there. I clearly said that MERs are a drag on performance, IG funds are overpriced, most financial advisors suck at managing investments, with IG you don’t know what you’re getting for an advisor, and there should be a barrier to entry preventing a lot of people from working there (or anywhere else.)
The reason for mentioning the study was to support my option that MERs are a small part of a bigger problem with mutual funds and investing though an advisor. Including at IG, so get over that. I’m bringing this up because MERs get all the attention / internet trolling.
What I was looking for in this conversation is if the writer is against IG specifically or the industry in general? I tend to have issues with the industry overall. I also wanted legit feedback on my point that investors lag the markets by way more than any MER.
I read several strong options in the preceding comments, so though it would be a good spot to throw out some ideas and see what people thought. I get that you don’t like IG, but that’s not a new idea or much of a solution to anything.

Nelson
on December 15, 2016 at 5:57 pm

Tom:

I believe the average person can run their own portfolio if they educate themselves just a little bit. That’s why this site exists. To help educate people.

There is value to working with an advisor. The issue is whether that value justifies the excessive fees. 2% of $10,000 is nothing. 2% of $1 million is a big deal. Roboadvisors have much better fees and I also think there’s (potentially) value in some folks working with a fee-only planner.

I also wrote about the huge advantage I think exists for a company like IG to embrace the roboadvisor model but with a real life advisor.

It’s not that Paul hates IG. He hates salespeople who are compensated extra for ripping people off. That model takes care of the advisor, not the client.

taz
on February 21, 2018 at 1:24 pm

Tom, the problem in your thinking comes down to this: “No one good at something charges less.” From that premise you conclude that fees are “a small part” of the problem. But in this industry, your premise couldn’t be further from the truth. The reality is that underlying performance is more or less the same for most funds (that’d be your “about 10%” figure), so the spread really comes down to fees. Notice how in this story the salesman argued that the fees are worth it because of “education” and “service” (and this is a typical response you’ll hear) – he doesn’t even try to pretend the RETURNS are higher after fees, because they’re not.

It’s not as if you risk underperforming by 7% in a fund just because it’s cheap. Most of these “average investors” earning 3% would be the individual retail investors with hardly any education (that is, most of them) who have poor diversification and/or are too active and end up throwing away gobs of money in unnecessary trading commissions.

So I’d say the biggest risk is trying to DIY with a lack of education, and the second biggest risk is getting ripped off by high-fee advisors. The takeaway is, take the time to educate yourself, OR go with a cheap robo-advisor.